BOD CORPORATION Balance Sheets as of December 31, 2014 and 2015 (5 in millions) 2014 2015 2015 $ Assets Current Assets Cash Accounts Receivable Inventory Total $ 2014 Llabilities and Owners' Equity Current Liabilities Accounts Payable $ 310 Notes Payable 200 Total 5 510 $ 190 700 480 $ 1,370 260 800 350 225 575 550 5 1,610 Fixed Assets Net Fbad Assets $ 1.670 3.2.130 $ 450 $ 500 Long Term Debt Owners' Equity Common stock plus paid-in surplus Retained Eamings Total 700 1,380 $ 2,080 800 1.865 $2665 Total Assets $ 3,040 $ 3.740 Total liabilities and owners' equity $ 3,040 $ 3.740 BOD CORPORATION 2015 Income Statement 15 in Millions) Net Sales Cost of Goods Sold Depreciation EBIT Interest Paid Taxable income Taxes Net Income $ 2.560 1.251 98 3 1,211 56 $ 1,155 347 5 808 Dividends Addition to Retained Earnings 323 485 Chapter 83 Mastery Problems 1) Using the financial statements for BOD Corp. Calculate the following ratios for 2015: a) Current Ratio Cunent Asseks launen hallines Biroj 1610/575 - 28 times b) Debt-Equity Ratio Taial delt raha total dels I Total assets c) Days Sales in Inventory d) Return on Equity e) Using the tables bekw and the ratios above only, give a brief summary of BOD Corps. financial position Ratio Current Debt/Equity ROE Top Quartile 2.1 1.3 0.54 Median 13 1.1 0.25 Bottom Quartile 0.8 0.6 0.11 2) The Pear Co. had sales of $105,500, a profit margin of 4 percent, and dividends of $2,000. What is the plowback/retention ratio? 3) A firm has a total debt ratio of 0.55, total debt of $330,000 and net income of $40,500. What is the company's return on equity (ROE)? 4) Blues Inc., has sales of $10,120, total assets of 53,780, and a debt-equity ratio of 0.30. If its return on equity is 15%, what is its net income? (Hint - Use the Du Pont Identity)